BMO InvestorLine: Pros and Cons

Self-directed investors want their online broker to be user-friendly and to offer the latest technology to enable them to trade the securities of their choice skillfully. BMO InvestorLine has won several accolades in this regard over the past few years. A look at one of the key players in the online brokerage revolution in Canada.

While most Canadian investors are satisfied with the ability of their online brokerage service to help them manage their portfolio easily and efficiently, 51% want additional tools and functionality to monitor their portfolio. In this regard, the platform offered by BMO InvestorLine, the source of the survey, remains one of the Canadian brokers to consider.

How is BMO InvestorLine different from the competition?

BMO InvestorLine’s desire to constantly improve the user experience is what sets it apart from its closest competitors. Press releases were issued in February, March, June and July to announce various new features. And that’s not counting the new features available since August 18, 2021.

For example, users now have faster access to trade. Buy and sell orders can be placed more quickly through the use of a simplified form that limits scrolling in the trading window.

“Our latest enhancements improve the digital trading experience, allowing our clients to personalize their online experience and invest with greater confidence and ease,” said Silvio Stroescu, Head, BMO InvestorLine, BMO Financial Group. Here are just a few of the features worth noting.

Portfolio Overview

Clients can now view their entire portfolio and multiple accounts in a single window. This gives investors a better view of their overall holdings by asset allocation and sector. This avoids silo management, i.e. managing each account type separately, regardless of the total allocation suggested by the investor profile.

Distributions Tab

Similar to Scotia iTrade, the BMO InvestorLine user now has access to a new dividend calendar and calculator. This is useful for remembering important dates related to the distribution of these earnings and for knowing the expected percentage yield, based on the amount invested in each security.

Trading Ideas

In a stock market that appears to be fully valued – despite the pullback of the past few weeks – the investor should be on the lookout for new investment opportunities. Don’t hesitate to evaluate new companies that have the potential to create value. BMO InvestorLine’s Trade Ideas feature provides you with the ability to identify investment opportunities based on 22 search filters, without having to look too far!

adviceDirect

This service is part of the BMO InvestorLine offering, although it requires a dedicated account, separate from a self-directed account. An adviceDirect account is a non-discretionary fee-based account that provides investment recommendations. However, clients make their own investment decisions and manage their own portfolios.

This is an online investment service that allows you to manage your assets with personalized advice. The tool continuously monitors your investments so that they remain in line with your investor profile. Essentially, it doesn’t take away your autonomy to trade your own securities. 

Instead, adviceDirect offers you a little guidance, without you having to deal with a real portfolio manager. Such a value-added service obviously comes at a cost, up to a maximum of $3750 per year, depending on the size of your assets.

It is not mandatory to subscribe to AdvisorLine to use the BMO InvestorLine brokerage service. However, some people may find it useful, especially if they want to take advantage of certain advanced features, such as the following.

Portfolio Status Check

This feature allows investors to assess their portfolio holdings based on four key indicators: asset allocation, diversification, security ratings and risk. The investor receives a report that summarizes the strengths and highlights areas of the portfolio that the investor may want to revisit. The investor can use this report to conduct portfolio status checks as often as they wish.

Does the BMO InvestorLine platform have any weaknesses?

The lack of a dummy account

Many competitors, such as CI Direct Trading, offer a dummy brokerage account to help you get familiar with their platform. For now, BMO InvestorLine is on the outside looking in.

Limited Login Options on the App

The proposed mobile app works well, but a biometric option to log in with a fingerprint would be appreciated. With the proliferation of passwords being used left and right, it would be helpful to be able to login in a way other than the conventional way.

What are the fees for using BMO?

As far as pricing is concerned, there is nothing to complain about: it remains standard, in line with what is prevalent in the industry. The flat trading fee is $9.95 per trade, regardless of the size of your portfolio or the number of changes you make to it. 

The $25 per quarter account maintenance fee for non-registered accounts and Tax-Free Savings Accounts (TFSA) can be waived provided you have a minimum balance of $15,000, have a registered account under the same banner, or have executed at least two trades in the previous six months. 

For registered accounts, no fee is charged when the value of an account is $25,000 or more. An annual administration fee of $50 is charged for each RESP under $25,000. For all other registered accounts, a $100 annual fee is charged when the account value is less than $25,000.

For those who wish to build a diversified portfolio at a lower cost, BMO InvestorLine now offers 80 commission-free exchange-traded funds (ETFs) from the three largest providers in Canada , namely iShares, Vanguard and BMO, as of June 2021.

Finally, the BMO Five Star Program offers exclusive benefits to investors who make more than 15 trades per quarter or invest at least $250,000. The program gives you access to attractive pricing and other premium tools, including BMO Pro Asset. There are three levels of membership available under this five-star program. 

BMO: What’s the verdict?

BMO InvestorLine’s reputation is not overrated. The trading platform is well oiled. For clients who simply feel safer having all their assets in one financial institution, and who already have banking products with that institution, the BMO InvestorLine self-directed account is a good choice. The user experience is impressive, and the pace of innovation is pleasing.

BMO InvestorLine has a history of delivering on its mandate to inform and educate its customers. Their site is full of information and research reports. Similarly, BMO InvestorLine recently partnered with personal finance expert Preet Banerjee to develop a series of educational videos designed to broaden and deepen investors’ investment knowledge.

On the other hand, investors who want to limit their transaction fees and account maintenance costs must make a trade-off when choosing this platform. There are several other discount brokers that can help you invest at a lower cost.

What we like about BMO

• The mobile applications are good and available for all environments.
• More than 80 ETFs are now available without commission fees.
• BMO’s willingness to accompany the investor in his learning process.
• The pace of deployment of improvements and new features is relatively steady.
• You can access several leading research providers to select your investments, such as BMO Capital Markets, Morningstar and S&P Global Ratings.

What we don’t like about BMO

• Transaction fees are higher than Questrade and Qtrade Direct Investing, among others.
• Lack of a dummy account, which often allows investors to try out a platform before making an asset transfer.